Installment Purchase Agreements

An installment purchase agreement (IPA) is an innovative payment plan offered by two states and more than a dozen localities with PACE programs. IPAs spread out payments so that landowners receive semi- annual, tax-exempt interest over a term of years (typically 20 to 30). The principal is due at the end of the contract term. Landowners also can sell or securitize IPA contracts at any point to realize the outstanding principal. The IPA financing plan won the Government Finance Officers Association Award for Excellence in 1990. This fact sheet provides basic information about installment purchase agreements.